The last two weeks I’ve been dancing around the topic of metrics without getting to the point, which is: How are things?
More importantly, how do you know?
Most businesses have some metrics. Some are very data-driven, some are barely so and there are plenty in between those two points. One of the differences between the very data-driven companies and those that are “sort of driven” is the quality of the metrics.
Good data vs. great data
There’s nothing wrong with good data. It’s certainly better than no data. Good data includes facts and figures like sales, costs, profit, inventory, payables and receivables.
Here are some good metrics: We have 1207 trucks on the road. Our drivers make $0.38 per electronically logged mile. It costs us $1.39 per mile for truck, driver, fuel and overhead (taxes, insurance, maintenance, etc).
Key to making good metrics into better metrics: Drill deeper. Hiding inside most good metrics is better, actionable information.
Quality isn’t just about accuracy, it’s also about the depth of the metric and the insight it communicates. What would happen if you drilled deeper into your good metrics? Would you find additional information to take action on?
Let’s drill deeper into the trucking metrics I mentioned above – on one topic: downtime.
Downtime isn’t on the list of metrics. It’s hidden inside overhead. It’s not solely about the maintenance to get the rig back on the road. It has hard costs (repair parts, repair labor) to you and to the driver (lost mileage and thus lost pay), in addition to the possible cost to your reputation. Showing up late or not at all not only risks your relationship with the client, but may also put their client relationships at risk. Embarrassing a good client by showing up late with their clients’ goods and materials can cost you far more than the price of that run.
What if that downtime makes you late for the next pickup? How far can this cascade across your business and the business of your clients?
Drilling down into good metrics
Here are a few downtime related questions to drill down with:
How many minutes of unplanned downtime do your trucks average per 100000 miles? What’s the average cost to get them back on the road, per incident? Per downtime hour? What would the change in revenue and expenses be if you could cut the average time in half?
If all of your rigs are company-owned, which model and model year are accruing the most downtime? For companies who lease rigs from drivers, which model and model year accrue the most downtime?
Is this downtime consistent across all owners or is there an 80/20 breakdown, where 20% of the drivers are accruing 80% of the downtime? Same 80/20 question for company-owned rigs. What costs are within 10% of the rest of the industry? Which ones aren’t?
Can any of these differences in performance be resolved with references to a better repair shop, a different brand of part / fuel / oil, better record keeping, more frequent maintenance or a different maintenance process?
For the ones that are outside industry norms, what can be done to leverage and improve the ones where you are beating the industry? Is there a legitimate reason for your business to be “below industry standards” in some ways?
Getting to better metrics
Having the answers to your business’ drill-down questions helps you improve consistently on a sustainable basis.
There are a couple of keys to drilling down:
Get organized. Before you can find better metrics inside your good data, your good data needs to be organized.
Take it a bite at a time. It’s easy to do one pushup before you get in the shower. Tomorrow, it’ll be easier to do two. Next week, 10 will seem easy. If you try to take on all of this at once, it will be discouraging because of the size of the task and the complexity of it. Keep it simple so it’s easier to delegate later.
Leave the rabbit chasing for another day. There will be plenty of time to address the things you notice while drilling down into one thing. You will almost certainly notice other things that require attention. Resist the urge to jump on them. Instead, make note of them and then finish the task at hand.